Porters Five Forces
In order to analyze the industry and environment of Ice Fili, Porter’s five forces model will be used to assess its competitiveness in the market. An illustration of the model specific to Ice Fili is displayed in Exhibit 1. The analysis will lead to the identification of various opportunities for Ice Fili, along with determination of the most appropriate strategy and associated milestone for the strategy.
Buyers are people or organizations who create demand in an industry. If buyers have significant bargaining power, industry returns can transfer to buyers in the form of lower prices. Buyer power is determined by various factors such as switching costs, the relative volume of purchases, the standardization of the product, elasticity of demand, brand identity, and quality of the products. Buyers are presented with many choices when selecting a product in the ice cream industry while distributors have the power to decide which products will be available to customers. Absence of preservatives and a high proportion of milk fat differentiate the domestic Russian ice cream from the foreign producers’. However, due to a vast number of similar products and the lack of protection for innovation leads to indifference between various domestic products. Customers are able to substitute one brand of ice cream to another or from ice cream to other foods altogether at any point in time. Pricing information is also readily available to customers and only large differences in price will affect the customers’ buying behavior. It should be noted that the buyers of ice cream for Ice Fili or any other ice cream producers are the distribution channel members, not the end consumers. As such, it could be inferred that the buyer power of the distribution channel members relative to the ice cream producers is high, and the buyer power of the end consumers to the distribution channel members is also high. It could also be implied that through this chain...